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Weekly Update June 21, 2013

Legislative and Political

UW System blasted for WiscNet pick

Two years ago, the state Legislature moved to sever the University of Wisconsin's ties to a provider of Internet service. Now some lawmakers are outraged that the UW System has picked this same provider to continue serving its campuses. "There have been repeated, flagrant violations of state law, intentional deception at a level that I just am flabbergasted by, even today, and no accountability for it whatsoever," said state Rep. Dean Knudson (R- Hudson) at a recent budget committee hearing. In a May 23 letter sent to UW System President Kevin Reilly, state Sen. Paul Farrow (R-Pewaukee) accused UW officials of "mismanagement and unethical behavior," saying they'd shown disdain for the Legislature and contempt for the laws and directives it passed. (Note: In addition to the Milwaukee Journal Sentinel coverage, this column is running in local papers across the state, including Green Bay, La Crosse, Madison, Portage, Reedsburg, Sheboygan, Wausau and Wauwatosa.)

Charlie Sykes podcast talking about the UW and WiscNet

During his June 20, 2013 radio show, Charlie Sykes did a segment on the UW and WiscNet issue. He opened the segment with the following quote: "I need to move on because I have another story about the University of Wisconsin. It is probably the most interesting story of the day, in terms of pulling the mask off just how arrogant and out of control UW bureaucrats have become." After you click the link above, you will want to fast forward to the 28:45 mark...where Charlie Sykes begins his comments on the UW and WiscNet issue.

Budget passes by one vote as vouchers take center stage

Senate Republicans passed the state budget by a one-vote margin just after midnight Friday as the state schools superintendent raised concerns a little-noticed provision could lead to a flood of students attending private schools at taxpayer expense. The budget passed 17-16, with Sen. Dale Schultz (R-Richland Center) joining all Democrats in opposing it. The budget now goes to Republican Gov. Scott Walker, who can alter it using his vast line-item veto powers. The budget would cut income taxes by $651 million and create a new statewide program that would allow children who meet income thresholds to use taxpayer money to attend private schools, including religious schools. In a statement released after the budget was approved, Walker said he was proud of the Legislature for its work on the budget.

If inclined, Scott Walker could change budget provisions with veto pen

With a pen stroke, Gov. Scott Walker in the coming days could broaden a proposed voucher school program, hold back bounty hunters at the state's border and pull pork projects from the budget. The budget bill that the state Senate passed just after midnight Friday morning now waits on Walker's desk for him to exercise what are arguably the most expansive veto powers of any governor in the nation. The broad outlines of the 2013-'15 budget aren't likely to change. Walker's fellow Republicans control the Legislature, and they worked closely with him on the proposal to reject a federal expansion of health care programs, cut income taxes by $651million over two years and require police to take DNA from people arrested for a felony before any conviction. The governor has until June 30 to sign the bill for the next budget, which starts July 1.

Regulatory and Industry

FCC: Landline Voice Lines Decline 4.7% in Six Months, VoIP Growth Slows

Data released late last week from the Federal Communications Commission documents the ongoing decline of traditional landline voice service. As of mid-2012, there were 102 million end-user switched access lines in service – down 4.7% from 107 million end-users six months earlier and maintaining the average yearly decline of about 9% seen for the previous three-year period. The new report, titled Local Telephone Competition: Status as of June 30, 2012; is based on subscribership data that carriers are required to file.

How the U.S. Got Broadband Right

As senators consider President Obama’s nomination of Tom Wheeler to lead the Federal Communications Commission, some observers have painted a dire picture of the state of Internet availability in America. One legal scholar, Susan Crawford, has argued that “prices are too high and speeds are too slow,” though she supports Mr. Wheeler, a venture capitalist and former telecommunications lobbyist. Other critics have called for new government policies to “fix” the telecommunications industry. Such criticisms are misplaced. If he is confirmed, Mr. Wheeler will have the good fortune to be arriving at the F.C.C. at a time when the United States has gained a global leadership position in the marketplace for broadband.

Court says no to access fees for telecom accused of 'traffic pumping'

The federal appeals court in Washington, D.C., has ruled against a South Dakota-based rural telecom company in a move that could end a controversial practice known as “traffic pumping.” Northern Valley Communications, based in Redfield and Aberdeen, challenged the Federal Communications Commission in court after the FCC ruled that Northern Valley could not charge long-distance carriers for certain calls. At issue was the practice of small, rural telecommunications companies working with high-volume call businesses, including adult entertainment lines, conference call services or chat lines. Under federal law, the small rural carriers are allowed to charge access fees to long-distance companies any time the rural company serviced a call from long-distance companies.

Planned $700 million data center in Iowa has speculation running rampant

A massive, $700 million data center code-named "Project Mountain" slated to be built in Des Moines, Iowa, however, no one seems to know what company is behing the initiative. Some are speculating that Amazon or Apple are moving into the area. Facebook, Google and Microsoft already have or are building their own data centers in the state. And given the size of the project and the tendency of tech companies to follow each other into new areas, Wired and other market watchers see Apple and Amazon as the most likely commercial candidates for the project.

Broadband and Internet

No Country for Slow Broadband

There is a popular story going around about the state of America’s broadband networks: service is pitifully slow, hugely overpriced and limited to the richest neighborhoods — whereas in Europe, service is cheap, fast and widespread because regulators force big companies to make room for smaller service providers. Almost none of this is true: America’s broadband networks lead the world by many measures, and they are improving at a more rapid rate than networks in most developed countries.

Monticello Moves Closer to Settlement with Bondholders

It has been about a year since we checked in on FiberNet Monticello, a city-owned FTTH network about 40 miles northwest of Minneapolis. At that time, the network was generating insufficient revenue to meet debt payments, the private company operating the network (HBC) was stepping down, and Gigabit Squared was kicking the tires. Since then, Gigabit Squared and Monticello decided against a partnership and the City ceased making payments to bondholders. Previously, the City had covered the difference between revenues and debt payments by borrowing from the City's liquor store fund, a municipal enterprise fund.

AT&T U-verse eyes 60 Mbps offering

AT&T is reportedly considering increasing its U-verse broadband speed to 60 Mbps downstream and 10 Mbps upstream sometime this summer. According to DSL Reports, citing an unnamed source from AT&T, the company is testing a new bonded modem/gateway that will provide faster U-verse broadband speeds. The source did not confirm the 60 Mbps download speeds or the 10 Mbps upload speeds, but several posters on the DSL Reports forum claiming to be AT&T technicians said that the 60 Mbps down/10 Mbps up speeds were being trialed in "several markets with a rumored launch sometime this year."

Cellular and Wireless

Mobile Data Will Soon Dominate Wireless Service Revenues

Despite a slow 2013 first quarter for net new connections, mobile data service revenue continues its impressive run for the wireless industry, according to leading wireless industry consultant Chetan Sharma.Mobile data revenue now accounts for close to 45% of total service revenue, and Sharma predicts it may pass the 50% mark for the U.S. market later this year (it’s already 65% in Japan), generating a total of $90 billion in 2013.

Superfast version of Samsung Galaxy S4 launches

Technology giant Samsung plans to sell a variation of its flagship Galaxy S4 smartphone that will transmit data at nearly twice the normal speed, the head of its mobile business has said. J.K. Shin, also co-chief executive of the world's biggest technology firm by revenue, said the phone would be sold in South Korea as early as this month. Samsung was in talks with several overseas carriers to begin selling the phone, Shin told the Reuters news agency in an interview at Samsung's headquarters in Suwon, just south of Seoul. He declined to name them.

IPTV and Video

Hulu Sale: Who Are the Buyers, and Why Do They Want It?

A Hulu deal is still weeks away, and bidders have lined up for the streaming service. But of a half-dozen suitors, who is the best buyer for the online streaming service? The Wrap spoke to agents, digital executives and the various parties involved in talks, and there was only one thing they agreed on: "No one is buying it for the same reason." The Wrap divided bidders into three categories – private equity firms, TV providers and Internet companies.

Having problems with your Netflix? You can blame Verizon

If you are trying to get Netflix and use Verizon’s broadband, then there is a good chance that your video performance is less than optimal. Some Verizon customers might even go as far as calling it a crappy Netflix experience. The reason: a behind-the-scenes power play between Verizon and Cogent Communications , one of the largest bandwidth providers. The head-butting between these two companies is over an arcane concept known as peering.